“The bigger the better, right?”
Well… That’s not always the case.
Is Your Freight Forwarder too Big For You?
Evaluating which forwarder is best for you will really boil down to how big your company is and how frequently you ship. Working with a big freight forwarder does have some perks, but do you really know what you’re paying for? Most small businesses receive the short end of the stick when working with larger freight forwarders since they don’t have much shipment volume. But generally speaking, these companies are completely unaware of what they are missing out on. After all, how would you know without comparison?
When evaluating whether your current freight forwarder is meeting your company’s needs and expectations, consider these factors:
Communication with your freight forwarder is critical. There’s too much volatility in the shipping process to risk working with a bad communicator. Furthermore, different people are in charge of different processes of the shipment, and your point-of-contact may not be the right one for certain questions.
When working with big forwarders, the task is often left to you to find the right person to speak with. That generally means lots of call transferring, unanswered questions, and “let me ask my manager” excuses. Do you know at all points who is handling your cargo, what they know about you and your company, and whether or not they are informed on the history of your shipment? With larger forwarders, the chances of that are slim.
Smaller freight forwarders take a huge advantage over large forwarders in communication. They will work directly with you to ensure you are getting the communication you need – not just the type of communication, but also the frequency. Small freight forwarders have a tight group of team members that work closely with one another to make sure their clients are receiving everything they need. They take the time to send relevant information and current updates on your shipments. With a smaller forwarder, you can speak directly with the person in charge of each process of your shipment.
Money talks. We get it.
Want an interesting statistic? All freight forwarders, small or large, are going to the same ~13 ocean carriers, ~50 airlines, and final mile truckers. The difference in costs and rate availability between the smallest and the largest forwarders is very little. The key difference in prices revolves around overhead expense, workforce power, and shipment volume.
Businesses who ship under 500 containers per year don’t usually see any cost savings from larger freight forwarders. Their primary focus is on working with larger clientele, and they won’t bend over backwards to save you the couple dollars you may need. It makes a big difference to you, but it doesn’t mean anything to them.
Smaller freight forwarders use close relationships, industry knowledge, and strategy as their source of value for their customers – not their brand name or ubiquity. Nothing is a cookie-cutter process, and that includes pricing. Finding the right rates is about having a conversation regarding options, routing, shipping modes, and transit time. Smaller freight forwarders will work closely with you to get you the right balance of each.
Shipping can get complex – after all, that’s the reason freight forwarders even exist. However, there’s not enough time in the day for 1 person to do it all. Freight forwarders, like any other company, rely on the strength of their team and collective knowledge to devise unique and valuable solutions. However, that web of knowledge and internal resource sharing becomes incredibly difficult as a team’s size grows.
Experiment: Imagine devising a solution to a complicated project with 200 people who have knowledge limited to very specific topics. Pricing managers make decisions at the expense of operational needs, and operations teams choose the “best” (most expensive options) leading to hidden fees down the road. To top it all off, the sales rep you’ve been communicating with doesn’t even know the names of those handling your shipment. It just doesn’t work.
Small freight forwarders rely on the well-rounded expertise of each other to devise solutions in an efficient manner. Fitting 5 people in a conference room is a lot easier than 200. It allows them to develop unique strategies rather than default to non-customizable processes.
A freight forwarder should be much more than just a transaction to ship your cargo. They should bring value to your company. Good customer service generally comes in the form of listening. Listening takes time and effort, and unfortunately, forwarders who have thousands of clients simply don’t employee the workforce needed to supply that level of customer service to all clients. It’s basic math.
On the other hand, small freight forwarders do have the time to listen. They value customer relationships beyond transactional value. Our team at InterlogUSA values our customers through active listening and communication.
Bigger is not always better. If your business is not shipping in excess of 500 shipments per year, working with a big forwarder could do more harm than good. Make sure to consider all factors when deciding on a forwarder who will fit best your company’s expectations and shipping practices.
Have you experienced frustrations with your current forwarder? Or are you settling for a content relationship with your forwarder rather than looking for better solution? Our team members at InterlogUSA would love to chat with you and answer any questions you have!